TOKYO (Reuters) – The dollar has rejected news of President Trump opposing the threat to block a thin-walled COVID-19 aid bill on Monday with many investors on holiday.
The pound hovered below a 2 1/2-year high in the Asian session following last week’s agreement on a narrow Brexit trade deal that does not cover the UK financial sector.
The dollar index changed slightly to 90,224, following a three-day slide.
The pound added 0.1% to $ 1.3544, beating water below the 2 1/2 year high of $ 1.3625 earlier this month.
Trump signed the $ 2.3 trillion pandemic aid and spending package law, officials said Sunday night, avoiding the federal government’s partial shutdown.
Earlier, he wrote on encrypted Twitter: “Good news about Covid Relief Bill. Information to follow! Earlier, he had called for an increase in stimulus controls for Americans with difficulty to $ 2,000 from $ 600.
The euro fell 0.1% to $ 1.2199, still retreating from the 2 1/2 year high of $ 1.2273 reached this month.
While last week’s Brexit deal came as a relief to investors, the nature of the pact leaves Britain much more detached from the EU, analysts say, suggesting that the cut that beat Britain’s 2016 assets will not go away any time soon.
Brussels has not yet made any decision on granting Britain access to the bloc’s financial market.
Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and the euro to fall against the dollar, reaching $ 1.30 and $ 1.15, respectively, by the end of the summer.
“Regardless of the Brexit agreement, the cable will no longer work,” he said.
“It’s buy the rumor, sell the truth.”
The dollar was slightly lower at 103.63 yen.
Political factors in central Japan have been divided on how far they should go in examining the control of the yield curve, with some calling for a comprehensive review of the framework, a summary of views expressed in the December rate review showed on Monday.
Reporting by Kevin Buckland; Montage by Stephen Coates